Tuesday, May 05, 2009

Thompson AyodeleOur colleague, Thompson Ayodele addressed European Parliamentarians in
Strasbourg yesterday. Roger Helmer, British Member of European Parliament
summarised Ayodele’s talk on his blog. Please read more

Some people say that Africa needs "A new Marshall Plan" of massive aid to
drag it out of poverty and set it on the road to prosperity and
self-sufficiency. Yet they seem unaware that in the last fifty years,
Africa has received the equivalent of five Marshall Plans in foreign aid.

Yet many African countries are getting poorer. Aid breeds dependency. It
undermines self-respect and enterprise. It creates perverse incentives.
For example, both African leaders and the major aid agencies and NGOs have
an incentive to present African countries as poverty-stricken and
dependent, in order to maintain the flow of aid.

No one, of course, thinks that Oxfam executives sit around and plot ways
of keeping Africa in poverty, in order to ensure the long-term survival of
Oxfam. Yet their mind-set — that aid is the solution, not the problem,
and that no matter how long we keep failing in Africa, more aid is the
only policy — has the same effect. There is a community of interest
between NGOs, African governments, charities in donor countries, and to an
extent donor governments, which maintains the status quo and denies Africa
the radical solutions it needs.

These, at any rate, are the views of Thompson Ayodele, the director of a
Nigerian think-tank The Initiative for Public Policy Analysis
(www.ippanigeria.org), whom I met at a dinner in Strasbourg on May 4th.
He sees several steps that need to be taken to achieve prosperity and
sustainable self-sufficiency in Africa. First, there is a fundamental
need for good governance, transparent laws, property rights and
enforceable contracts, without which no free economy can flourish.

This is something that only Africans themselves can deliver, although they
could benefit from Western help. But Thompson’s second criterion depends
on the developed world. We need a commitment to open markets and free
trade. Put simply, poor African producers cannot trade their way out of
poverty unless we in the West open our markets to their produce.

Here in Europe, the EU’s Common Agricultural Policy, and similar
protectionist subsidy régimes around the world (especially in the US), are
the problem. We have not only been closing our doors to imports from
developing countries. We have also been subsidising the export of excess
food production from the EU to poorer countries, undermining local farmers
and driving them off the land and into big city slums. There are now some
steps to eliminate these export subsidies, but they are too little, too
late.

Thompson had hair-raising stories of aid programmes in Africa where huge
sums have been corruptly siphoned off to local bodies and officials, and
of ambitious and grandiose flagship projects that have failed to be
completed. The logical route would seem to be to use aid for projects
that directly benefit the economies of recipient countries, and for the
donor nations to control the projects in some detail to ensure that the
money is actually used for its intended purpose.

But the trend seems to be in the opposite direction: more
government-to-government aid, allowing recipient governments at best to
patronise their own client constituencies of supporters, at worst to
divert aid to military spending, Swiss bank accounts and corrupt personal
wealth.

Is there any good news amidst this litany of failure and waste? Thompson
points to the mobile phone market, which in Nigeria, and Uganda, and other
African countries has created a free market in at least one sector, and
allowed African entrepreneurs to get a step up on the ladder of
prosperity. Arguably this one new technology has done more to create jobs
and prosperity in Africa than fifty years of Western aid.

There is no substitute for trade. We in the West must stop talking about
free trade and start doing it. Trade opportunities will create
entrepreneurs in Africa with proper pride and self-confidence, and with
the entrepreneurs, pressure for reforms of governance. We should forget
about aid (except in limited and highly controlled contexts). We should
reject ineffective window-dressing solutions like "Fair Trade" brands.
And instead we should take down our trade barriers and dismantle the
iniquitous CAP.

Roger Helmer is a British Member of European Parliament